RIYADH: The net income of Saudi finance companies declined 67.7 percent to SR283 million ($75.2 million) in the second quarter from SR593 in the first quarter, revealed the data from the Saudi Central Bank, also known as SAMA.
It’s the largest drop recorded since the beginning of 2018, when SAMA started tracking the data, implying a restriction in the cash flow from operating activities.
According to the report, Saudi finance companies also recorded the lowest net income since the fourth quarter of 2021, which was SR103 million.
The return on assets dropped to 0.51 percent in the second quarter from 1.6 percent in the quarter ending March — the most since the start of 2018.
The data further showed that finance companies’ return on equity fell by a record 2.73 percent in the second quarter, going from 4.03 percent in the first quarter to 1.3 percent in the second quarter.
The net income of Saudi finance companies focused on real estate amounted to SR84 million, around 29.7 percent of the aggregate last quarter.
Their return on assets recorded 0.58 percent in the second quarter compared to 0.8 percent in the first.
Non-real estate finance companies, on the other hand, dominated the sector with 70.3 percent of aggregate net income amounting to SR199 million, according to the SAMA data.
These companies reached a 0.49 percent return on assets last quarter compared to 1.97 the quarter before.
Since 2021, the net income of finance companies has shown alternating patterns.
Net income rose by SR258 million in the first quarter of 2021, fell by SR210 million in the second, rose by SR185 million in the third and dropped by SR518 million at the end of the year.
As for 2022, the first quarter saw a record rise of SR774 million before the steep fall of the last quarter.
